Blacklisting Proposal Sparks Industry Opposition

By Nick Wakeman Staff WriterIndustry groups are beating the drums of opposition to a Clinton administration proposal to prevent bad actors from bidding on government contracts.Comments are due Nov. 8 on a proposed amendment to the Federal Acquisition Regulation that would give contracting officers the power to stop a company from bidding on contracts if the company has violated tax, employment, environmental, antitrust or consumer protection laws.To battle the proposal, several industry organizations have formed the National Alliance Against Blacklisting. Members include the American Electronics Association, the National Defense Industrial Association, and the U.S. Chamber of Commerce. The Information Technology Association of America and the Professional Services Council also have taken stands against the proposed regulation."Contractors are going to be denied due process," said Harold Coxson, an attorney and lobbyist with the Ogletree, Deakins law firm in Washington. Coxson, who is the executive director of the National Alliance Against Blacklisting, said there is no need for the change because there already are ways to punish companies that do not comply with tax, labor and other laws.Agencies can pursue debarment proceedings against a company, which would prohibit the company from doing business with the federal government, said Nancy Saucier, manager of domestic policy at the American Electronics Association. The procedure is used regularly by the government. For example, 7,100 individuals or companies were debarred in 1998, she said."If you are looking for the bad actors, you already have the debarment process," she said.Coxson said there is concern that contracting officers would apply the amendment inconsistently. A contracting officer at one agency may approve a company, but a contracting officer at another agency may reject it, even though both officers considered the same evidence, he said.The amendment provides no guidance on what evidence contracting officers are to consider, Coxson said.Saucier said: "Contracting officers are not experts in tax laws or environmental laws or consumer protection laws." Deidre Lee, administrator of Federal Procurement Policy at the Office of Management and Budget, said that contracting officers have the ability to make a determination if a company is in compliance with certain laws. Lee is one of the administration officials spearheading the effort to get the proposal on the books."I have a great deal of confidence in our acquisition work force and our contracting officers. These are the people we ask every day to make multimillion dollar decisions on who gets a contract and who doesn't," she said. Congress also is getting into the act. In a Sept. 29 letter from Rep. Tom Davis, R-Va., to OMB Director Jacob Lew, Davis and 35 other lawmakers, mostly Republicans, voiced their opposition to the amendment. The group includes eight Democrats.In the letter, Davis said the changes to the regulation will have a "negative impact on the ability of the federal government to obtain information technology products and services."The House Small Business Committee also planned to hold a hearing Oct. 21 on the proposed regulation. Other hearings are likely after Jan. 1, Saucier said.Current laws are adequate to keep unscrupulous contractors from doing business with the federal government, Davis said.The proposed regulation has the support of labor unions. AFL-CIO officials call the regulation a "common-sense solution. ... Taxpayers' dollars should not go to chronic lawbreakers," they said.The change in the regulation was proposed in July. Comments are due to the General Services Administration Nov. 8. A final rule likely will not be published until February or later.Lee said that the negative reaction to the proposal is overblown. "We think that the taxpayer expects and deserves that we spend their money with companies that comply with the law," she said. Lee said the amendment is not a substantial change to the regulations, which already have a requirement that contracting officers make a determination that a company has a "satisfactory record of integrity and business ethics." The amendment only gives examples of the types of things contracting officers should look at in making that determination, Lee said.Lee said that contracting officers will be looking for patterns of behavior and not isolated incidents."If you have someone who has repetitively and substantially not complied with these laws, what makes us think they are going to change now?" she said.